NZUSA - NEW ZEALAND UNION OF STUDENTS' ASSOCIATIONS

NZUSA�s campaign for the government to immediately introduce a living allowance for all full-time students is intensifying in 2006. Currently, not even a third of all students receive an allowance while studying, while for those under 25 the situation is far worse. Only around 25% of all students under 25 receive an allowance while studying.

The number of students receiving an allowance in recent years has continued to drop, both nationally and on a campus-by-campus level.

Year	Number of student allowance recipients
2001	70,231
2002	68,869
2003	64,036
2004	60,826
2004	56,806

It is nothing less than obscene that students are forced to borrow money from the Student Loan Scheme in order to live, buy groceries, get to and from their institution and pay ever increasing rent and electricity bills. We do not live in a fair society when students are forced into borrowing money in order to eat and live.

The student movement and most people in New Zealand think it fair and just that students be supported with a living allowance while studying full-time. We do not believe that students should be forced into long hours at work, which impacts on their studies, in order to support themselves. Students who participate in tertiary education now will then go onto contribute to the social and economic base of New Zealand, and should be supported while gaining tertiary qualifications.

74% of participants in a Colmar-Brunton survey in August 2005 believed that more students or all students should receive a living allowance while studying.

In 1992, the National Government�s introduction of strict parental means testing for students under 25, to determine allowance eligibility, represented a significant attack on students. Along with students, as one of the poorest groups in our society, other groups, namely workers, beneficiaries and the elderly, have also experienced similar attacks on their income over the last 15 years. More than anything, cuts to allowances and other forms of government assistance have represented a further transfer of wealth from the poorest groups in society to the wealthiest.

The introduction of means testing parental income for students under 25 years was a product of the government�s significant cuts to public spending. National commissioned the Tertiary Review in 1991, with one recommendation extending means testing from those under 20 years to those under 25 years. This was because it would save the government an additional $125 million per year. By restricting allowances and forcing thousands of students to borrow to live, their goal has been achieved.

It was therefore surprising to hear earlier this year when Dr Lockwood Smith, National�s former Minister of Education from 1990-1996, admitted that the requirement for students to be tested on their parents� income until the age of 25 was unfair and regrettable. We hope he can convince his colleagues that this is still the case and that National will promote a universal student allowance for all students.

Up until 1992, nearly every student (86.4 percent) studying at a public tertiary education institution in New Zealand received a living allowance or grant while they studied.

Prior to the mid 1970s, student support was based on a system of bursaries and scholarships. In 1976, a new system of government-funded tertiary bursaries was introduced. This included a study or living costs grant that was available to most students.

In 1989, the fourth Labour Government introduced the Youth and Student Allowances Scheme. Compared to the universally applicable standard tertiary bursary that had existed from 1976, an element of means testing was implemented for students under 20 years.

During the 1990 election campaign, the National Party promised to scrap the parental means test. However, this promise was broken soon after they took office after the 1990 election. The 1991 Budget saw the then Education Minister, Dr Lockwood Smith, implement a number of recommendations from the Tertiary Review, including extending parental means testing for those under 20 to those under 25.

It is worth remembering that Labour went into the 1996 election promising a universal student living allowance, and that its education spokespeople in the late 1990s, Steve Maharey and Trevor Mallard, constantly talked about Labour returning to a universal allowance.

Strict parental means testing for students under 25 has had disastrous consequences. Between 1990 and 2001, the proportion of full-time students receiving an allowance fell from 85.4% to 36.7%. By 2004, the proportion of full-time students receiving an allowance had dropped to 29%.

The parental income thresholds never moved or kept pace with increases in average incomes or inflation, and were frozen from when they were first introduced in 1992 until they rose for the first time in 2005.

There have been alterations to the parental income thresholds in recent years, however none of these changes have substantially increased the number of students receiving an allowance, and are far from anywhere near the introduction of a living allowance for all full-time students.

A Budget 2004 announcement resulted in parental income thresholds being adjusted for inflation on 1 April 2005, and annually thereafter. The parental income thresholds were also increased, to come into affect from 1 January 2005. However, incorrect modelling led to this increase having no impact whatsoever on uptake of allowances and instead we saw decreasing numbers of students receiving allowances in 2005.

From 2005, the government also cut the Independent Circumstances Allowance (ICA), resulting in a number of students losing allowance entitlement. The Ministry of Education estimated that this would save the government $102.2 million over 2004/05 to 2007/08.

There was a 9% reduction in the number of 16 to 24 year old single students receiving a living allowance between 2003 and 2004 � down from 23,756 in 2003 to 24,359 in 2004.

Further small changes to allowance policy were announced in Budget 2005, and these changes took affect on 1 January 2006. Time will tell whether these changes will lead to a significant increase in the number of students receiving allowances.

The personal income that students could earn, while entitled to an allowance, was increased from $135.13 before tax per week to $180.00 before tax per week. Further, for any income a student has that is over $180.00 before tax; their before tax living allowance will be reduced by the same amount.

The earning spouse income threshold for allowances was increased from $270.26 before tax per week to $360.00 before tax per week. The joint income cut off point was increased from $610.00 a week before tax (or $630.00 if they have dependent children) to $750.00 a week before tax.

The parental income taken into account to determine student allowance eligibility (for those under 25) will be reduced by $7,000 for families with more than one full-time tertiary student and will be reduced by $3,400 if parents are living in separate households.

Labour promised to increase access to student allowances at the 2005 election so that half of all students receive an allowance while they study. Although some way from the student movement�s goal of a universal living allowance, this is a start but students hope this promise gets delivered on very shortly.

Year	Lower limit to determine full allowance	Upper limit for abated allowances (living at home)	Upper limit for abated allowances living away from home)
1992 - 2004	$28,080	$45,760	$50,760
2005	$34,606	$57,981	$63,825
2006	$35,700	$59,000	$65,000
2007	$39,270	$63,383	$69,413

� 2005 and 2006 thresholds as at 1 April of those years
� 2007 as at 1 January 2007

The total amount of money that the government spends on living allowances has declined in recent years. Living allowance expenditure decreased in 2004/05, and follows decreases in total expenditure since 2001/02, as demonstrated in the table below. Allowance expenditure in 2004 was less than in any of the five proceeding years and 2.7% lower than in 2003.

Year	Living allowance expenditure $million
1997/98	344
1998/99	378
1999/00	376
2000/01	391
2001/02	401
2002/03	387
2003/04	380
2004/05	359

Students are the only group in our society who are not entitled to public income assistance when out of paid work. While the cost of living increases more and more, full-time students are being forced to scramble together income from a range of sources to meet ever increasing weekly living expenses - whether through working long hours on top of full-time study or borrowing to live from the loan scheme.

The following table details the average cost of living expenses, revealed in the TNS Income and Expenditure Survey (2004)

Expenses	Wkly Average
Food	61
Local transport	32
Accommodation	116
Entertainment	36
Living expenses	40
Personal items	17
General bills	38
Miscellaneous	30
Childcare costs	59

Expenses	Auckland $	Hamilton $	Palmerston North $	Wellington $	Christchurch $	Dunedin $
Accommodation	149	112	85	112	106	99
Local transport	38	25	25	34	33	19
Food	70	59	59	69	57	50
Entertainment	42	28	22	38	32	32
General bills	46	48	25	51	26	24
Living expenses	54	39	36	39	33	28
Personal items	17	16	17	22	13	14
Miscellaneous	70	22	16	38	25	20
Childcare costs	74	45	45	67	37	62

Expenses	Average $
Text books and course costs ( not fees)	521
Clothes	457
Travel outside town	694
Music (CDs, etc), books	185
Medical/dental/optical	350
Computer/stereo/appliances	1,020
Purchase of consumer items over $50 (not cars/bikes)	694
Purchase of cars/bikes	3,095
Other major expenses	802

New Zealand�s low level of living allowance eligibility and relatively high cost of living forces a large number of students to borrow to live from the Student Loan Scheme and/or scramble together income from a range of sources.

In a 2005 report by the North American-based Education Policy Institute, research compared countries on six different measures of tertiary education and student living cost affordability. Out of a total of 16 countries, New Zealand only scored 15th, while understandably Sweden and Norway, two countries that have a fully funded tertiary system, scored first and second.

NZUSA believes that students must be relieved from the burden of being forced to borrow to live and plunged into high debt. Students must be provided with a living allowance as of right while enrolled in full-time tertiary study, and out of full-time paid work. Full-time study is just that � full-time! We strongly deplore the current and previous government�s view that debt constitutes a form of income for students.

The following table reveals the income spread for students who participated in the 2004 Income and Expenditure Survey, indicating the percentage who received a particular source of income compared with the 2001 survey data and the average yearly income for each category.

Income source	2001 %	2004 %	2004 average $
Student allowance	41	33	5,140
Monetary gifts from parents	29	28	5,268
Income tax refund	21	16	2,101
Schorship	17	14	4,188
Dividends/trust income/interest	11	7	3,214
Money from selling assets	6	6	2,982

30% of all borrowing under the Student Loan Scheme includes borrowing for student living costs, and 50% of all loan scheme borrowers in 2004 borrowed for living costs.

The maximum a student can borrow per week is $150.00. Despite being the longest un-inflation adjusted figure on the government�s books, this is not a sufficient amount to live on, in light of increasing costs, and particularly if students have no where else to turn for income.

The following tables reveal the high levels of debt forced upon students due to low levels of allowance eligibility.

Year	2002	2003	2004	2005
Amount borrowed ($million)	282.3	298.3	293.6	282.5
Total number of borrowers	78,046	79,647	77,890	73,668
Average amount borrowed ($)	3,617	3,745	3,770	3,835

The logic from parties who support age related means testing tends also supports the view that if a student is ineligible for an allowance then their parents will support them.

However, only 28 percent of all respondents to the TNS Income and Expenditure Survey (2004) reported receiving some parental support while studying, and this was not necessarily on a weekly basis. The median amount gained from this source for the year was $1,999. The 1998 Income and Expenditure Survey revealed that 31 percent had received some form of monetary gift from their parents.

In an attempt to avoid higher debt from borrowing to live, many students are now forced to work increasingly longer hours during term time.

The number of full-time students in the TNS Income and Expenditure Survey (2004) who said they worked regular hours during term time was 67 percent. This figure was 41 percent in the 2001 Income and Expenditure Survey. 35 percent of full-time students surveyed in 2004 stated that they had casual work during term time.

The TNS Income and Expenditure Survey (2004) revealed that while students work an average of 13 hours per week, 12 percent of full-time students worked more than 20 hours per week in 2004 and 4 percent worked more than 30 hours per week. Of those who stated that they worked during term time in the Income and Expenditure Survey (2004), 55 percent worked more than 10 hours per week.

Students who work during the holidays and during their course are usually working in stressful and low-paid jobs, such as in fast food restaurants, cleaning, caf�s or bars. More often than not, union membership in these workplaces is low and inflexibility exists over work hours. This can interfere with study commitments and finishing work late at night or early in the morning means public transport options are extremely limited.

The poverty wages of New Zealand�s retail and service sectors means that many students work long hours, but for very little pay! The low minimum hourly wage rate is common place amongst New Zealand�s retail and service sector. Currently, New Zealand�s minimum adult wage rate is a low $10.25 per hour, while the discriminatory youth rate (for 16 & 17 year olds) sits at a low $8.20 per hour.

Along with other groups, NZUSA supports Green MP Sue Bradford�s private member�s bill that seeks to abolish the youth minimum hourly wage rate so that 16 & 17 year olds, if paid at the minimum hourly rate, are paid the same minimum hourly wage rate as other workers. Some of these workers will be tertiary students, working during term time to meet weekly expenses and fund a large chunk of their own way through the education system. They should therefore be treated the same as their peers working in the same position.

There is no doubt that a significant overall increase in the minimum wage would provide full-time students, who are forced to work during term time, with the option of reducing the amount of hours they work in order to spend more time focusing on study and the commitments faced by full-time tertiary students.

NZUSA, along with a number of academics, have also been increasingly concerned at the impact that work while study has on academic performance, study outside classes and student life.

There is evidence to suggest that those students forced to work as a result of financial hardship face great implications in terms of academic performance. Working increasingly longer hours to make ends meet during term time means that their studies suffer as a direct result.

Being forced to work longer hours during term time sometimes means missing lectures or tutorials, submitting work that they aren�t particularly happy with and probably would have liked more time to work on, having difficulty accessing libraries and computer facilities, and may account for the lower level of participation in tertiary institution clubs and sports teams.

A New Zealand Vice-Chancellors Committee study on student employment patterns found that 56% of surveyed students agreed or strongly agreed with the statement, �I would be more successful in my studies if I did not have to spend as much time employed during term-time as I do�.

Researchers in the United Kingdom in 2005, which has a similar user pays fees system and targeted student support regime as New Zealand, found that many students believed term time working damaged academic performance and that the more students worked during term, the lower their average end-of-year marks or final degree results. The study also found that students from the poorest homes and ethnic minority backgrounds were most likely to be working longer hours to help pay weekly bills.

In a Salient interview in September 2003 (Issue 22), Prime Minister Helen Clark was quoted as saying:

NZUSA thinks the government should recognise the irony in the statement above and immediately introduce a living allowance for all full-time tertiary students.

At the 2005 NZUSA Debt Summit representatives from all political parties in parliament were asked to sign a pledge to increase access to student allowances if they were part of the next Government. Labour, the Greens, the Progressives, Maori Party, New Zealand First and United Future all agreed to increase access to living allowances. National and ACT did not.

If the government is serious about equal access to public tertiary study and supporting students while they are enrolled, as well as serious about keeping students out of debt, then they must ensure that all students have access to a universal living allowance.